### CFA Practice Question

There are 434 practice questions for this study session.

### CFA Practice Question

The sponsors of a well-known charity came up with a unique idea to attract wealthy patrons to a \$500-a-plate dinner. After the dinner, it was announced that each patron attending could buy a set of 20 tickets for the gaming tables. The chance of winning a prize for each of the 20 plays is 50-50. If you bought a set of 20 tickets, what is the chance that you will win 15 or more prizes?
A. 0.006
B. 0.250
C. 0.021
Explanation: This is a binomial probability. The probability of getting r successes out of n trials, where the probability of success each trial is p and probability of failure each trial is q (where q = 1-p), is given by: n!(pr)[q(n-r)]/r!(n-r)!. Here, n = 20, p = 0.5 and q = 0.5 and r = 15,16,17,18,19,20. Therefore, we have:

P(15) = 20!(0.515)(0.55)/15!5! = 0.0148
P(16) = 20!(0.516)(0.54)/16!4! = 0.0046
P(17) = 0.0011
P(18) = 0.0002
P(19) = 0.00002
P(20) = 0.000001

The sum is 0.0207.

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